Massive GST refund scam uncovered in Siliguri CGST zone
The Statesman | 19 June 2025
A large-scale GST refund scam involving fake exports to Bhutan has come under the scanner of the Central Goods and Services Tax (CGST) Siliguri Commissionerate, with officials uncovering fraudulent refund claims running into hundreds of crores over the past few years.
The scam came to light when it was found that several taxpayers were falsely claiming GST refunds by showing exports of high-tax commodities—such as pan masala, gutkha, cigarettes, tobacco, cold drinks, tires, mobiles, and tiles—to Bhutan through Jaigaon, Birpara, and Chamurchi Land Customs Stations (LCS). However, in reality, no such exports were made. The goods were reportedly being diverted to the local Indian market without invoices, sold at cheaper rates, and undermining genuine trade practices.
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“These fake exports were essentially used to claim wrongful GST refunds, causing a serious leakage in government revenue and defeating the very policy of ‘One Nation, One Tax, One Market’,” said Dr Jeetesh Nagori, Commissioner, CGST Siliguri.
Dr Nagori, who took charge in August 2024, ordered a thorough investigation into the unusually high refund claims being made over the years. The sanctioned refunds had ballooned from ₹4 crore in 2017–18 to over ₹148 crore in 2024–25, with a sharp spike seen especially in the last three financial years.
Year-wise Refund Sanction Figures:
2017–18: ₹4 crore
2018–19: ₹47.20 crore
2019–20: ₹44.76 crore
2020–21: ₹52.85 crore
2021–22: ₹65.91 crore
2022–23: ₹164.75 crore
2023–24: ₹136.07 crore
2024–25: ₹148.86 crore
Following the Commissioner’s directions, all refund claims related to evasion-prone goods are now being scrutinised more rigorously.
“We have mandated compulsory physical verification of taxpayers’ premises before processing refunds in such cases,” Dr Nagori stated.
The Jaigaon LCS In Alipurduar district emerged as the primary route for the bogus exports. Officials noted that its proximity to Bhutan Gate (about 1.5 km) and multiple by-lanes in the area made it vulnerable to misuse, with goods often not actually crossing the border.
During the investigation, it was also found that a syndicate of unscrupulous elements was operating in the region, taking commissions for arranging forged documents like the Bank Realisation Certificate (BRC), which is crucial for refund claims. “Some individuals in Jaigaon, lured by easy money, had even borrowed from banks and moneylenders to invest in this illegal trade,” officials revealed.
Under the Commissioner’s leadership, action has been taken against fake suppliers who issued invoices without delivering goods. Authorities also cross-verified export claims with records from paramilitary forces, Customs officials, and the Bhutan Government. So far, three individuals have been arrested in connection with the scam.
“Data analytics on supply chains, transport routes, and purchase records are now being closely monitored. Attempts to pressure the department through CPGRAMS (Centralised Public Grievance Redress and Monitoring System) complaints and legal petitions have been firmly dealt with,” said Dr Nagori.
As a result of the crackdown, refund claims in sensitive categories like pan masala, tobacco products, cold drinks, and cigarettes have dropped to zero across North Bengal. In a significant impact, refunds in the first two months of FY 2025–26 have dropped sharply to ₹13.7 crore, compared to ₹38 crore during the same period last year.
“This turnaround demonstrates our commitment to protecting revenue and ensuring that only genuine exporters benefit from the GST regime,” the Commissioner concluded.